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This week I've got stories for you about Amazon killing their long-standing charity program, banks looking to compete with Apple Pay, and Google coming out with a new device for the Indian market.
I also share stories about the Olympics “diving” into e-commerce, Instagram going quiet, and an update about the Epic Games vs Google lawsuit.
All this and more in this week's 105th Edition of Shopifreaks. Thanks for subscribing and sharing!
Poll of the Week 🗳️
“How many times did you purchase through AmazonSmile in the past 10 years it's existed?”
Last Weeks Poll Results: Last week I asked if you were more likely to make a purchase if the store offered BNPL as a payment option. A whopping 74.6% indicated that they do not use BNPL at all, while 14.3% said they'd be more likely to purchase if BNPL were offered, and 11.1% said it would make no difference. [View Poll]
Stat of the Week 📈
Amazon customers receive their orders in 1.9 days on average, compared to 4.4 days at Walmart and Target. — According to NielsenIQ
1. Amazon kills Smiles
On Feb 20th, Amazon is ending AmazonSmile, the company's longtime charity donation program that allowed users to donate a percentage of their purchase to charities of their choice.
The program launched in 2013 and has since delivered $500M to charity partners.
Why kill the smiles? Amazon feels that it can have a greater impact by consolidating its charitable donations into a few select projects versus spreading them thin across many charities.
Amazon wrote in a statement, “After almost a decade, the program has not grown to create the impact that we had originally hoped. With so many eligible organizations—more than 1 million globally—our ability to have an impact was often spread too thin.”
The thing is though, impact is relative. While Amazon might look at a 4 or 5 figure donations as minimal impact, some charities have come to rely on the program to keep the lights on.
The Squirrelwood Equine Sanctuary, a Hudson Valley-based animal sanctuary, tweeted, “Amazon claims the AmazonSmile program didn't have an impact. I can tell you as an animal not for profit it made a huge difference to us.”
Plus, many charities raised more than an insignificant amount:
- World Wildlife Fund: $4.9M
- Cancer Research UK: $1.8M
- Dana-Farber Cancer Research Fund: $153k
In its statement, Amazon mentioned some of the larger philanthropical donations it makes including:
- Housing Equity Fund: Investing $2B to preserve affordable housing in hometown communities.
- Amazon Future Engineer: Funding computer science curriculum for more than 600k students across 5,000 schools in undeserved communities.
- Community Delivery Program: Partnering with food banks in 35 cities to deliver more than 23M meals.
- Amazon Disaster Relief: Using their logistics capabilities to provide fast aid to communities affected by natural disasters.
- Community Giving: Supporting local nonprofits in cities where their employees live.
While those are all great initiatives, there is one big difference between AmazonSmile and the above projects… which is that customers get to CHOOSE their impact through AmazonSmile.
At a time when literally everyone is coming for Amazon's market share (Walmart, Target, Temu, Shopify, etc), I would not do anything to fracture the personal buying relationship Amazon has with customers.
If anything, 2023 is the year to double down on AmazonSmile and put the program, which has historically been hidden behind a subdomain, front and center on the marketplace and integrated into checkout.
A longtime criticism of the AmazonSmile program is that it's never been promoted properly and required too many steps for consumers to participate (a move that can only be assumed to be intentional by the king of one-click checkout and conversion optimization).
Amazon should have let customers permanently support their favorite charities with one click through their purchases and then gamified the system so that we could watch our lifetime donations grow over time.
AmazonSmile will go down in history as a missed opportunity, both for charities and for Amazon. Between all the cost cutting measures we've seen the company take recently, this is the Scroogiest and most misguided of them all.
PS: Don't forget to take this week's Twitter Poll and join the conversation.
2. Olympics “dives” into e-commerce
The International Olympic Committee teamed up with On Location, a US events specialist, to launch an e-commerce website that sells tickets with hospitality packages. (Aren't you glad I didn't say Ticketmaster?)
It's the first time in the Games' history that the Olympics will utilize a single, centralized platform for ticket sales. The website went live on Tuesday and got off to a relatively smooth start with wait times under two minutes to access it.
The website offers packages that bundle a ticket to a sporting event with access to an official entertainment venue such as Clubhouse 24 or Salon 24.
About 90% of the Olympic sports competitions are available with a hospitality offer.
On Location President Paul Caine said in a statement, “For many years, hospitality was basically the same: tickets plus services. This is not our vision for Paris 2024. We want to offer emotions and provide stories for travel enthusiasts.”
The events company paid almost $1.5B for the rights to service the Olympics, which also included selling packages for the 2026 Winter Olympics in Milan and Cortina d'Ampezzo, Italy, and the 2028 Olympics in Los Angeles.
Other platforms like Booking.com and Expedia can still sell packages to the Olympics, but the packages won’t include tickets to the competitions.
3. BigCommerce News (Sponsored)
BigCommerce welcomed back e-commerce industry veteran Mark Adams to the team, who will join the company as senior VP and general manager for EMEA.
Adams previously led BigCommerce’s entry into the European market from 2018 to 2020 and established the team that has been driving EMEA growth since then. BigCommerce reported 31% YoY revenue growth in EMEA in Q3 of 2022, the most recent financial reporting period.
Marc Ostryniec, chief sales officer at BigCommerce, wrote, “We are thrilled to have Mark back at the helm of BigCommerce EMEA after his recent success leading Attraqt. His impressive business acumen and outside-in thinking will be a tremendous asset to BigCommerce. Mark was the original pioneer in building and growing the region and now he gets to take EMEA to the next level of growth with a great team, reputation and ability to deliver as we move upmarket to lead a new era of enterprise ecommerce.”
Adams joins BigCommerce following two and a half years as CEO of Attraqt, where he led the publicly listed company through the global pandemic and completed multiple acquisitions, ultimately leading to the company’s December 2022 acquisition by K1 Investment Management.
BigCommerce and MKM Building Supplies, the prominent UK-based hardware and commercial building supply company, announced the launch of MKM’s new online storefront. Built with powerful headless technology on the back end to enable scalability and flexibility, the new site delivers a unified omnichannel and seamless B2C shopping experience to drive sales.
MKM’s legacy platform previously experienced slow page loads, navigation issues and had a high total cost of ownership. In addition, the company was challenged to manage tens of thousands of product SKUs and to create localized and personalized B2B, B2C and B2B2C shopper experiences across regions.
Andy Pickup, digital & marketing director at MKM Building Supplies, said, “Launching on BigCommerce allowed us to personalize the customer journey and deliver frictionless experiences across channels. Since moving to the platform, we have been performing above expectations on ecommerce metrics and driving more physical store visits.”
4. Banks vs Apple Pay
Several major banks including Wells Fargo, Bank of America, JPMorgan Chase, and four others are planning to release a digital payment wallet to compete with Apple Pay, Google Pay, PayPal, and the host of other digital wallets on the market.
In December I showed you which digital wallets were leading the pack with market share in 2022:
- Apple Pay: 44%
- Google Pay: 15%
- PayPal: 11%
- Walmart Pay: 3.2%
- Samsung Pay and Other made up the remaining market share
Just our luck, the digital payment will be managed by Early Warning Services LLC, the bank-owned company that operates Zelle, which has come to be known as the preferred tool of fraudsters. The payment app grabbed the attention of US senators last year, who began an investigation into the service for its allowance of rampant fraud.
Although owned and operated by the same company, the new digital wallet will operate separately from Zelle. The wallet has not been named yet, but is set to roll out mid-year.
Would you trust a digital wallet from the makers of Zelle? Hit reply and let me know.
5. Google Soundbox
Soundboxes have taken off in India, and Google wants a piece of the market.
First — what's a soundbox? Soundboxes are hardware used by merchants that emit a sound every time a mobile payment is made.
So pretty much this?
Actually, probably more comparable to an old fashioned cash register noise, except it can be customized with voice notifications in different languages.
Google, who is one of the country's mobile transaction leaders with Google Pay, is now piloting a soundbox of its own to alert sellers of confirmations for UPI payments.
Google started distributing its white speakers, branded Soundpod by Google Pay, in a few markets across North India. The boxes come with a QR code on the front, linked to the business owner's bank-registered phone number, which can be used to make any UPI-based payments.
The boxes feature a built-in speaker that announces a payment confirmation in different languages. And unlike competitors' soundboxes, Google's device also includes a small LCD panel that shows the payment amount, battery, and network status.
Google is actually late to the game with their soundbox in India. Other companies have offered boxes for several years now including Paytm, who offered the original soundbox in 2020, and Walmart-owned PhonePe and BharatPe. All three companies charge for the boxes.
It's big business too! Paytm claims to have distributed more than 5.8M soundboxes to date and said that its devices processed more than 5B transactions in 2022.
6. Twitter Blue Annual & Blocked Apps
In Twitter news this week, the company is now offering an annual Blue subscription for users who think the platform will still exist in a year.
The revamped Twitter Blue subscription was launched last December for $8/month (or $11/month for iOS users), and now users have the opportunity to get a discount at $84/year if they purchase it on the web (to avoid iOS fees).
Elon Musk’s version of Twitter Blue includes the blue check mark, 60-minute video uploads and priority ranking in reply threads.
The discounted annual price only applies to users in the US, Canada, Japan, New Zealand, Australia and the UK versus countries that could use a break.
Twitter Blue isn't the only thing reportedly getting a discount at Twitter.
According to reports last week, Twitter is offering advertisers that spend more than $500k on Twitter ads a 100% match on their spending in equivalent marketing value up to $1M, to combat the significant decline in ad spending that Twitter has experienced since the Elon takeover.
Elon also announced this week that Twitter will soon offer a “higher priced subscription that allows zero ads.”
But what about the apps?
Last but not least this week at Twitter, the company took heat for purposefully blocking third-party apps like Tweetbot, Albatross, Fenix, and Twitterific, claiming that it's finally “enforcing its long-standing API rules” which “may result in some apps not working.”
The sudden blockage and lack of communication from Twitter left developers and users frustrated and confused.
Tweetbot co-creator Paul Haddad told The Verge, “We have still heard nothing from anyone at Twitter on any level. If there’s some long-standing rule that we’ve been unknowingly breaking for the last 10+ years, we’d love to know what it is so that, if possible, we can comply with it.”
7. Instagram Quiet Mode 💤
Is anything that Instagram does still considered e-commerce news? Or are they so far from e-commerce at this point that we should stop paying attention?
Instagram is expanding its selection of time management tools with the launch of a new feature called “Quiet Mode,” which aims to reduce users' anxiety by silencing incoming notifications, auto-replying to DMs, and setting your status to “In Quiet Mode”.
What's funny is that I've had Instagram, Facebook, LinkedIn and all other social media apps in “Quiet Mode” for as far back as I can remember now — disabling notifications on my phone. At this point, the only notifications I get are for Calls, Texts, and E-mail. All other notifications are permanently disabled. So I understand and appreciate the appeal of this new feature!
Instagram said that it will prompt teen users to enable the feature if they're using the app late at night. And when they exit Quiet Mode, the app will offer a summary of what was missed during the downtime.
Here's what you missed: “Nothing important. Go back to sleep.”
Other updates rolled out to the app include expanded parental control tools and other tools to manage recommendations.
In other IG news, the company's head, Adam Mosseri, admitted that the platform went too crazy with the videos last year. After going full throttle on Reels in 2022, Instagram is now working on a better balance for users who enjoy seeing photos.
8. Epic Games vs Google goes to jury
Epic Games and Match Group's antitrust case against Google involving its alleged abuses of power in the Android app market will proceed to a jury trial on Nov 6, 2023, a judge in the Northern District of California ruled.
Epic Games began its path to suing Apple and Google back in 2020 when it introduced a direct payment option in Fortnite in its iOS and Android apps, prompting both companies to remove the game from their app stores.
Here's a recap of what's gone down so far:
- Epic sued both companies for antitrust abuses. Apple largely won its case, but both sides appealed. Epic still wanted Apple held accountable, and Apple didn’t want to change its terms to permit third-party payments.
- In an appeal hearing, the DoJ voiced concerns over how the lower court had misinterpreted U.S. antitrust law.
- The DoJ is also entered into the early stages of filing its own suit against Apple.
Epic's claims against Google are similar to its claims against Apple, although they take into account the differences with Google's app policies. Google, unlike Apple, allows apps to be sideloaded on Android devices, which is initially how Epic Games chose to distribute Fortnite to users when it launched on Android, and then again after the game was kicked out of Google Play store.
Since Google doesn't restrict the game (or any app) entirely, Epic has focused its antitrust claim on the means Google used to maintain market power, including an internal program where Google paid game developers hundred of millions of dollars in incentives to keep their games on the Play Store.
In a recent hearing related to the case, a California federal judge criticized Google for not preserving evidence from employee chats and threatened Google with a “substantial, trial related penalty” if the court found evidence related to the trial was destroyed.
The Epic vs Google / Apple saga will continue this year.
9. Other e-commerce news of interest
Brands are observing that TikTok is leading to an increase in their offline sales, not just their online sales. Prebiotic soda brand Poppi, which is sold at Walmart, Target, and Publix, estimates that 15% of its brick-and-mortar sales come from TikTok.
commercetools launched Frontend, a solution that enables businesses to compose and deliver digital websites and applications through their portfolio of site experience APIs and business tooling. Paired with the company's Composable Commerce, Frontend enables merchants to orchestrate data from different headless services through their API hub, and build websites faster using their component layer.
TikTok announced plans to speed up its small store global expansion into 12 new countries including Brazil, Australia, Italy, France, Spain, and New Zealand. TikTok's GMV grew 136% last year, and the company has set a GMV goal of $23B for 2023.
MailChimp was hacked for the second time in the past six months, in a breach that appears to be almost identical to the previous incident. Dozens of customers' data was exposed, but the company did not say for how long the intruder was in its system. One of the targeted accounts belongs to WooCommerce, who had its customers names, store web addresses, and e-mail addresses taken.
Speaking of breaches, PayPal confirmed that accounts of over 34,000 customers were breached through a “credential stuffing” attack, where hackers attempt to access an account by trying out username and password pairs sourced from data leaks on other websites. This is why you shouldn't reuse your passwords!
Google Stadia's servers are officially shut down as of Wednesday, two months shy of its third birthday. In September the game streaming service announced that it would be shutting down, just a few months after having tweeted that Stadia would NOT shutting down.
Netflix founder and co-CEO Reed Hastings announced that he would step down after more than two decades at the company. In the announcement, he noted that Netflix had planned its next era of leadership for many years. Netflix will maintain the co-CEO structure after Hastings' departure, promoting COO Greg Peters to the tandem role with Ted Sarandos.
“Two guys doing one job? We've got to do something about that. This is knucklehead talk. I'm not going to bite it. You can’t give me gravy and tell me it’s jelly ’cause gravy ain’t sweet!” – Jo Bennett
Klarna, which is based in Sweden, said that the US is now its largest market in terms of revenue, with volumes up 92% YoY. The company has 32M customers in the US, which accounts for more than a fifth of its worldwide user base and represents a 44% increase YoY.
The Federal Cartel Office (FCO) in Germany is looking into PayPal's rules on surcharges, concerned that restrictions PayPal imposes on merchants could be harming competitors and inflating costs for consumers by restricting price competition. Clauses in PayPal's TOS include merchants not being able to offer their goods and services at lower prices if customers choose a cheaper payment method.
Playter, a UK provider of B2B BNPL, introduce its newest credit offering called Paid, which allows clients to offer their own customers extended BNPL payment terms of up to 12 months.
Amazon partnered with Quikjet, a Bengaluru-based cargo airline, to launch its air freight service in India. Amazon Air was first made available in the US in 2016 and later to Europe. The Indian market has two cargo aircraft, of which each can deliver 20,000 packages.
Brazil and Argentina are working together to create a common currency for Latin America. Leaders of the two South American economies will meet this week to discuss a plan to create a currency that will boost regional trade and reduce reliance on the USD. One of the goals of the project is to create the second-largest currency union, after EUR, which encompasses approximately 14% of the global GDP.
David C. Katz filed a derivative investor lawsuit on behalf of Block Inc. against the company's board of directors, claiming that they failed to properly monitor and protect the personally identifiable information of its Cash App customers during a Dec 2021 data breach. In November, I reported that a Texas consumer filed a similar class action lawsuit against Block and Cash App, arguing the companies failed to prevent a data breach that exposed personal information.
Amazon's Music Unlimited subscription will cost an additional $1 in the US and £1 in the UK as of Feb. 21. The decision follows Apple’s move in October to charge higher prices for Apple Music, raising individual subscriptions from $9.99 to $10.99 in the US.
Whole Foods wants to triple the number of new stores it opens each year, with plans to open 30 new stores a year, up from 11 in 2022. CEO Jason Buechel also noted that the company is looking at new store formats, sizes, and shapes. Whole Foods currently has 534 stores around the world.
Two Minnesota brothers are being investigated for running a TikTok gambling scheme in the state's casinos. The state Alcohol and Gambling Enforcement Division is investigating allegations that the brothers had been collecting fees for playing slots on behalf of others watching TikTok, which state law prohibits.
One in three U.K. retailers surveyed by PYMNTS plan to add support for scan-and-go payments. Some of the country's major grocers have already launched apps that allow customers to scan as they shop and pay with their mobile phones, paving the way for wider adoption across Europe.
10. Seed rounds, IPOs, & acquisitions
ThriveCart, a platform that offers a set of tools for creating online shopping carts and sales funnels, raised $35M in a round led by LTV SaaS Growth Fund. The company will put the fresh funds towards further developing its platform and tripling the size of its workforce.
Amberflo, a platform that helps tech firms add usage-based pricing tiers to their products, raised $15M in a Series A round led by Norwest Venture Partners, closely following a $5M round led by Homebrew. The platform has been adopted by more than a dozen tech firms and will use the funds to hire more workers.
The Edit LDN, a London-based marketplace that offers a premium shopping experience for sneakerheads, raised $4.8M in a round led by Regah Ventures. The company's revenue has grown 525% YoY, hitting $12M in 2022, and they will use the funds to expand into the US and MENA region.
Copilot ,a platform that helps marketing agencies, accounting firms, and law firms run and grow their businesses, raised $10M in a Series A round led by YC Continuity and Lachy Groom, at a $100M valuation. The funds will be put towards expanding their team, particularly on the engineering and product organization side, to build a “Shopify-like” app store specifically for service businesses.
Tabby, a MENA-based BNPL startup, raised $58M in a Series B round co-led by Sequoia Capital India and STV, at a $660M valuation. PayPal Ventures was also a participating investor. The company will use the funds to expand its product line into consumer financial services and expand operations.
Link, a payments platform that enables customers to make online payments using their bank accounts and ACH open banking, raised $20M in a Series A round led by Valar, bringing its total amount raised to $30M. The company will use the funds to launch account verification and bring merchants in compliance with Nacha's new account validation rule. (Nacha manages the development and governance of the ACH network.)
Oro, an open source B2B e-commerce platform co-created by Magento's co-founder, raised $13M in a round led by Zubr Capital, bringing its total amount raised to $25M. Oro targets B2B companies like manufacturers, suppliers, distributors, and wholesalers. Everybody wants a piece of the B2B market this year!
Kuai Commerce, a London-based startup that enables brands to sell directly to Chinese Gen-Z consumers via social commerce, raised $2.4M in a pre-seed round that included a number of Chinese influencers. The company will use the funds to launch its e-commerce solution, which will initially help European merchants sell their goods in the East.
Beaconstac, a QR code customer engagement platform, raised $25M in a Series A round led by Telescope Partners. The company has helped businesses track 1.8M QR codes that were scanned over 150M times by consumers in the past 12 months, and will use the funds to accelerate their growth.
Pack, a low-code frontend platform for headless commerce, raised $3M in a round led by Alpaca. It will use the funds to further develop its platform and expand its partnerships, engineering, sales, and marketing teams.
Chord Commerce, a modern commerce platform that combines headless commerce and data infrastructure, raised $15M in a Series A round co-led by Bright Pixel Capital and Eclipse. It will use the funds to expand its data capabilities and support availability for larger customers.
Shein, the Chinese fast fashion company that was valued at $100B in April, is now seeking $3B at a valuation of $64B, according to Financial Times. However Shein denies the accuracy of some of the information, a spokesperson told TechCrunch.
Wallapop, a Barcelona-based peer-to-peer marketplace for consumers looking for more localized, less wasteful, and more ecofriendly routes for buying and selling items, raised $87.4M in an extension to its $191M Series G round from February 2021, at a $823M valuation. The company will use the funds to continue its expansion in Europe and put more into data science and other areas of R&D.
euShipments, a Bulgarian e-commerce logistics courier, acquired a majority stake in Pick & Pack, a Croatian startup for fulfillment and logistics. This is the company's first acquisition and a step in its development strategy to consolidate a leading position in the e-commerce markets across the CEE region.
HotelRunner, a London-based global hospitality and travel technology provider, raised $6.5M in a Series A round led by 212, Wix Capital, and seven others. Last June, I reported on the company's strategic partnership with Wix, when they began offering their services directly through the Wix platform.
What'd I miss?
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See you next Monday,
Paul E. Drecksler
PS: Why are elephants bad dancers? They have two left feet.